Inflation rate accelerated to 4.5 percent in February, the fastest increase in consumer prices in three-and-a-half years from 4 percent in January, on higher costs of food, beverage and tobacco, data from the Philippine Statistics Authority show.
The PSA said the inflation figure was based on the 2006 consumer price index. The PSA, however, made 2012 as the new base year. Based on the 2012 index, inflation reached only 3.9 percent in February, up from 3.4 percent in January.
Inflation in the first two months averaged 4.2 percent, based on the 2006 index, breaching the upper limit of the government’s target range of 2 percent to 4 percent. Based on the 2012 index, inflation averaged 3.7 percent in the two-month period, still within the target range.
“The uptrend resulted from the faster annual gain recorded in the heavily-weighted food and non-alcoholic beverages index at 4.8 percent and the double-digit annual increment in alcoholic beverages and tobacco index at 16.9 percent,” the PSA said.
Higher annual increases were also noted in the indices of clothing and footwear, at 2 percent; furnishing, household equipment and routine maintenance of the house, 2.5 percent; transport, 5.8 percent; and restaurant and miscellaneous goods and services, 2.5 percent.
Lower annual hikes were observed in the indices of housing, water, electricity, gas and other fuels at 2.6 percent; communication, 0.2 percent; and recreation and culture, 1.4 percent. The rest of the commodity groups retained their previous month’s rate.
A faster annual mark-up of 4.8 percent in February was observed in the food index at the national level. It was pegged at 4.6 percent in January and 3.2 percent in February 2017.
Bangko Sentral Governor Nestor Espenilla Jr. said the impact of the implementation of the Tax Reform for Acceleration and Inclusion law could be one of the reasons in the inflation spike in February but he remained optimistic it could be “transitory.”
“The BSP will remain watchful of the inflation dynamics...,” he said in a speech during the general membership meeting of the Management Association of the Philippines in Makati City Tuesday, his first public appearance since he announced last week that he was cancer-free and on his way to recovery.
Economic Planning Secretary Ernesto Pernia said measures to curb inflation and cushion its impact on the poor were urgently needed after the inflation rate reached the upper band of the government’s target, based on the 2012 index.
“The transitory impact of the Train law and the continued depreciation of the Philippine peso will mainly influence price movements in the coming months, and we must ensure that mitigating measures should be in place,” Pernia said.
Pernia said the government should pay closer attention to the poor. He said there was a need to expand the Pantawid Pamilyang Pilipino program and fast-track the distribution of unconditional cash transfer from the Train law.